See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/263094623

Target market selection in B2B technology markets

Article  in  Journal of Marketing Analytics · March 2014

DOI: 10.1057/jma.2014.6

CITATIONS READS

4 8,173

1 author:

Art Weinstein
Nova Southeastern University
69 PUBLICATIONS   1,022 CITATIONS   

SEE PROFILE

Some of the authors of this publication are also working on these related projects:

B2B segmentation View project

Customer Value in the Now Economy - [Marketing Blog] View project

All content following this page was uploaded by Art Weinstein on 06 July 2015.

The user has requested enhancement of the downloaded file.

Original Article

Target market selection in B2B

technology markets
Received (in revised form): 25th April 2014

Art Weinstein
is an internationally known expert in segmentation. Dr Weinstein has consulted for leading companies in the world, such as Bayer,
Bristol-Myers Squibb, Citrix Systems, Hewlett Packard, Intel and Motorola. He is the author of Handbook of Market Segmentation,
3rd edition and was founder/editor of the Journal of Segmentation in Marketing. His research on B2B segmentation has been
published in Journal of Marketing Management; Journal of Small Business Management; Journal of Strategic Marketing; Journal of
Targeting, Measurement and Analysis for Marketing and Marketing Intelligence & Planning; amongst others.

Correspondence: Art Weinstein, H. Wayne Huizenga School of Business and Entrepreneurship, Nova Southeastern University, Carl
DeSantis Building, 3301 College Avenue, Ft. Lauderdale, Florida 33314, USA
E-mail: art@nova.edu

PY
ABSTRACT This article examines how marketing executives employ target marketing
strategy in business technology markets. This exploratory study evaluated market selection
strategies (differentiated, single segment, segment-of-1 and undifferentiated) and target

O
marketing success. Particular attention is paid toward choosing target markets by examining
segment attractiveness criteria. The three most important criteria for target market selection
C
were opportunities in the industry, sustainable differential advantage and profitability. The
research also found that competitive analysis was a strong predictor of target marketing
R
success. In addition, market-oriented firms (use customer needs or customer groups to
define markets) are more successful in using technology than non-market-oriented firms
O

when redefining markets. The work concludes with sections on strategic implications for
business target marketing and a research agenda for segmentation scholars.
TH

Journal of Marketing Analytics (2014) 2, 59–69. doi:10.1057/jma.2014.6

Keywords: target marketing; segmentation; technology companies; B2B markets; segment

U

attractiveness; market definition

A

INTRODUCTION products, in the same territory, under the

According to Kotler and Keller (2010), the
formula segmentation, targeting and positioning
(STP) is the starting point for value creation
and the essence of strategic marketing. Kotler
(2003) adds, ‘all markets consist of segments
and niches’. Success results from the best
prospects for an organization’s goods or
services – its target markets. Building on
Darwinian theory, parallels between
biological competition and business
competition have been drawn. Just as no two
species can coexist if they make their living in
the identical way, firms that offer the same
same conditions, with the same clientele
cannot coexist equally. Eventually, one will
dominate (Henderson, 1989).
Sound market selection can provide
business marketers a strategic competitive
edge. For example, Sportmed sells medical
instruments and supplies to physicians who
practice sports medicine – the treatment of
sports-related injuries. Two psychographic
segments emerged from a research study
(Cleland and Bruno, 1996). Progressives were
early adopters of new technology and willing
to ‘pay up’ for the competitive edge this

© 2014 Macmillan Publishers Ltd. 2050-3318 Journal of Marketing Analytics Vol. 2, 1, 59–69
www.palgrave-journals.com/jma/
 Weinstein
equipment gave them in their medical
practice. Traditionals were more cautious
customers who waited to adopt new
technology until it had been broadly accepted
in the market; they were willing to forego
possible competitive advantage in their
medical practice and believe in ‘playing it
safe’. Using a value-added analysis, four high-
tech segments were found in researching the
mobile professional – specialized solutions,
customized solutions, value solutions and
packaged solutions (Dunn et al, 1999). In the
context of a case study for Citrix Systems,
Weinstein (2011) identified 17 B2B
segmentation variables within a nested
framework which helped management
introduce a new product. Hence, strong
target marketing relates to successful business
performance.
Business segmentation: An
assessment
R
Bill Neal, the founder of SDR Consulting
(Atlanta, Georgia, USA) and former president
O
of the American Marketing Association,
explains, ‘Business managers have relearned
TH
the benefits of target marketing. Most
marketers now recognize that simplistic
segmentation schemes based on
U
demographics, geography or SIC codes
are suboptimal at best – and disastrous at
A
worse’ (Neal, 2002, p. 37).
Organizational segmentation has gained
momentum as firms recognize its power
in forging customer relationships. Yet, few
companies use this strategic planning tool
effectively. Bossidy and Charan (2002) stated
that less than 5 per cent of the plans they
have seen contained useful segmentation
information. Most voluminous marketing
plans devote a majority of their pages to
review product features and promotional
material but offer only a limited discussion
of customer profiles, benefits sought and
what is valued in business relationships.
According to Yankelovich and Meer (2006),
59 per cent of large companies commissioned
60 © 2014 Macmillan Publishers Ltd. 2050-3318 Journal of Marketing Analytics Vol. 2, 1, 59–69
a major segmentation study within the past
two years but only 14 per cent of the
executives said they gained real value from
them.
Research on segment-of-one marketing,
niching, customer loyalty initiatives, customer
relationship management (CRM) programs
and web analytics advocate market
segmentation by profit potential (Peppers and
Rogers, 2004; Kaushik, 2007). As Wyner
(2009) explains, ultimately, the value of
segmentation ‘should be based on its
likelihood of achieving improved marketing
and business performance’. With heightened
attention given to personalization and
PY
relationship marketing, precision target
marketing is a key marketing activity to create
value-enhanced experiences that connect
O
customers with brands. Clemons et al (2010)
call this ‘finding the sweet spot’ – which,
C
in turn, is a strategy that leads to superior
profitability.
Hence, the purpose of this article is to
critically examine the use and success of
target marketing practices from the
perspective of marketing executives in
B2B technology companies.
MARKET SEGMENT
ATTRACTIVENESS
Measuring segment potential helps business
marketers in determining which segment(s)
to pursue. Companies must carefully assess
and weigh key discriminating criteria to find
the ‘best’ market segments. Criteria for
choosing targets can be quantitative or
qualitative. Quantitative criteria include sales,
profits, market share, growth rates and
financial measures (for example, breakeven
points, customer lifetime values, net present
value, return on investment, and so on).
Although MBA-trained managers tend to
prefer such metrics, numbers alone can be
misleading. Although multi-page spreadsheets
often ‘look great’, frequently the sales
forecasts or profit projections are based on

incomplete data, questionable assumptions
or flawed research methodologies.
Qualitative indicators can include nature
of business preferred, an assessment of
strengths and weaknesses or industry
structure, geographic coverage, market
trends, or strategic synergy – for example,
the ability to use existing distribution
channels, build on process strengths or
capitalize on excess factory capacity.
Based on research of UK Times 1000
companies, Simkin and Dibb (1998)
found that the three most important
criteria for selecting target markets were
profitability, market growth and market size.
Likely customer satisfaction, sales volume,
likelihood of sustainable competitive
advantage, ease of access of business,
opportunities in the industry, product
differentiation and competitive rivalry
rounded out the top 10 criteria (note,
23 items were tested). The authors
conclude that businesses in the United
R
Kingdom should replace their short-term
financially oriented focus with a more
O
long-term, analytical and objective view
TH
of market segmentation. A decade later,
Dibb and Simkin (2008) concluded
that profitability was the number one
market selection criterion followed by four
U
frequently cited drivers – market growth,
market size, likely customer satisfaction and
A
sales volume (the remaining 18 criteria were
called occasionally cited considerations).
McDonald and Dunbar (2004) add that
segment attractiveness factors be weighted
based on the particular requirements of
an organization. They also provide a list
of 27 possible, generalized segment
attractiveness factors in five major areas –
segment factors, competition, financial
and economic factors, technology and
socio-political factors. Although growth rate,
accessible segment size and profit potential
offers a reasonable starting point in most
markets, they advise that two or three
additional metrics be incorporated into
the market selection analysis.
© 2014 Macmillan Publishers Ltd. 2050-3318 Journal of Marketing Analytics Vol. 2, 1, 59–69
Target market selection in B2B technology markets
RESEARCH QUESTIONS
A major objective of market segmentation
analysis is to find growth opportunities. As the
preceding research indicates, it is apparent that
there is an opportunity to improve in this
area. Building on the brief overview of the
literature, this empirical study queries B2B
marketing executives about their perceptions
of how well target marketing is used in their
technology companies. Technology markets
are vital because of a transformation to an
entrepreneurial, global and knowledge-based
economy (Weinstein et al, 2013). Below are
the four major research questions that guide
this investigation:
PY
Research Question 1: Are companies that
use segmentation strategies
(differentiated, single segment or
O
segment-of-1) more effective in target
marketing success than companies that
C
use undifferentiated marketing
strategies?
Research Question 2: What are the most
important target market selection
criteria to B2B technology marketers?
Research Question 3: Is there a significant
relationship among the effective use
of marketing activities (competitive
analysis, customer relationship
management, research, niching and
social media) and target market success?
Research Question 4: Are companies that
use market-oriented strategies for
redefining markets (customer needs
or customer groups) more successful
in their use of technology than
non-marketing-oriented strategies?
METHODOLOGY
An e-mail survey was used to collect data
from marketing managers in business
technology markets. The questionnaire was
distributed via SurveyMonkeyTM and data
analyzed through SPSS 17.0.
61
 Weinstein
Content validity was assessed by having
two marketing professors with expertise in
B2B segmentation and technology markets
(major publications and work experience in
this area) evaluate the research instrument to
ensure that it clearly specified the domain.
From an external validity perspective, the
research instrument was pretested in person
with 14 marketing executives at five leading
Silicon Valley B2B technology companies –
Infoblox, National Semiconductor, Sun
Power, Symantec and Trend Micro. Two
respected marketing practitioners affiliated
with the Business Marketing Association
(BMA) of Northern California assisted the
researcher by facilitating these group in-depth
interviews which lasted from one to two
hours. The author spent two full days
dialoging with senior-level technology
managers on market segmentation challenges
and strategic marketing opportunities. Based
on these inputs, the questionnaire was
refined, as needed.
R
Given the exploratory nature of this
research, a snowball sampling technique
O
was employed to collect the data.
TH
According to Churchill (1995, p. 19),
snowball sampling is a judgment approach
that is useful for sampling special populations
(for example, business marketing managers).
U
He adds,
A
This sample relies on the researcher’s ability
to locate an initial set of respondents with
desired characteristics … those initially
asked to participate would also be asked for
others whose cooperation would be
solicited. Thus, the sample ‘snowballs’ by
getting larger as participants identify still
other possible respondents.
Although snowball sampling may
introduce some non-probabilistic sample bias,
this technique is useful to locate and target
relatively difficult-to-reach respondents such
as technology executives (Kahan and Al
Tamimi, 2009). As Lamm and Meeks (2009)
explain, garnering information from a broad
cross-section of organizational and industry
62 © 2014 Macmillan Publishers Ltd. 2050-3318 Journal of Marketing Analytics Vol. 2, 1, 59–69
characteristics improves the generalizability of
the research findings.
Two hundred and fifty B2B technology
marketers were contacted through personal
networks, business advisory councils at the
sponsoring university and members of
professional organizations (Business Marketing
Association and American Marketing
Association Marketing Strategy and LinkedIn
special interest groups). Seventy marketing
managers responded to the survey resulting in
a respectable 28 per cent response rate.
As Table 1 shows, three major
sectors – technology, B2B/professional
services and computer-related – accounted
PY
for 83 per cent of the respondents (17 per cent
were in the medical/ pharmaceutical business).
Fifty-seven per cent of the participants
O
worked for small companies (less than
$25 million in revenue), the other 43 per cent
C
was split between medium-sized and large
organizations. More than 80 per cent of
the respondents were male. Nearly half of
the sample was 30–49 years old with the
other half being 50+ (only 4 per cent of the
respondents were under 30). This reflects
the experience level of the sample since
two-thirds of the respondents worked 10 or
more years in a marketing position.
MAJOR FINDINGS
Research Question 1 assessed the effectiveness
of B2B target marketing success based on
market selection strategy employed
segmentation base (see Table 2). Overall,
three out of four companies (75 per cent)
use a differentiated strategy (target two or
more market segments with multiple
marketing strategies). The remaining three
market selection options were split fairly
evenly among the two highly targeted
approaches – single segment (10 per cent)
and segment-of-1 (7 per cent) – and the
undifferentiated option (7 per cent). These
results are encouraging because previous
studies in B2B technology markets found
rates for undifferentiated marketing to be
 Target market selection in B2B technology markets

Table 1: Sample profile

A. Industry sector % n

Technology 30 21
B2B/professional services 29 20
Computer-related 24 17
Medical/pharmaceutical 17 12

B.Company size Number of employees % n Annual revenues % n

Small < 100 57 40 < $25million 60 42

Medium 100–499 16 11 $25–500 million 14 10
Large 500+ 27 19 > $500 million 26 18

C. Gender % n

Male 83 57
Female 17 12

D. Age % n

PY
< 30 4 3
30–49 49 34
50+ 46 32

O
E. Years in a marketing position % C n

3 or less 16 11
4–9 17 12
10 or more 67 47
R
O

Table 2: Market selection strategy and target marketing success

TH

Targeting success market Unsuccessful Somewhat Successful Very N/%

strategy successful successful

Undifferentiated 0 4 1 0 5/7%
Differentiated 7 17 21 7 52/75%
U

Single segment 0 3 2 2 7/10%

Segment-of-1 0 1 2 2 5/7%
A

Totals/Distribution 7/10% 25/36% 26/38% 11/16% 69/100%

two-and-a-half to four times that – that is, 18
to 28 per cent, respectively (Weinstein, 1993;
Kalafatis and Cheston, 1997).
Although the number of responses was
limited in this exploratory study, some
interesting findings were evidenced,
nonetheless. Most B2B technology firms
utilize a differentiated strategy and more than
half (54 per cent) were successful or very
successful in targeting markets. Another third
(33 per cent) were somewhat successful and
only about 13 per cent of the differentiaters
were unsuccessful. In this latter case, it is
likely because they are unfocused and/or
over-extended and pursue too many market
segments or niches.
Based on limited observations, single
segmenters understand their business and
sole target market and were successful.
Segment-of-1ers were the most successful
group – these precision target marketers
personalize the experience and really know

© 2014 Macmillan Publishers Ltd. 2050-3318 Journal of Marketing Analytics Vol. 2, 1, 59–69 63
 Weinstein

their customer needs and wants. Non-target Research Question 2 explored 10

(undifferentiated) marketers deliver a one-size-
fits-all solution which in some cases may be
‘good enough’, but often they are not overly
successful. Illustrations of the four strategic
market possibilities in the words of the
marketers follow (note the advantages of target
marketing and the peril for failing to do so):
We serve companies with different
purchasing behaviors and needs. In order to
serve them efficiently, we develop
promotion campaigns and sales programs for
each particular segment. (computer supplies,
medium-sized company(differentiation))
generally accepted criteria B2B technology
marketers use to target markets. Selection
criteria rated as first received three points,
those cited as second earned two points and
those mentioned as third in importance
garnered one point (non-top three criteria did
not get any points). This rating mechanism is
similar to the approach employed by Simkin
and Dibb (1998). The top five criteria were as
follows: (1) opportunities in the industry,
(2) sustainable differential advantage,
(3) profitability, (4) product differentiation
and (5) customer satisfaction. Consider this
insightful comment from one participant in

PY
What works for us is to concentrate on one
the study.
industry segment and focus on buyer needs
for the service we offer … we have a very We evaluate opportunities in the industry.
high level of expertise and contacts in one Our available/addressable market is

O
industry, pharmaceuticals so developing overlayed with our product capabilities and
businesses in other industry segments has distribution strengths. We often pass on
been difficult. (service provider to the
C large markets that might force us to use a
pharmaceutical industry, small company distribution method that does not fit well
(single segment)) with our business. (oil and gas transporter,
R
small company)
We respond to comments via delivered
O

content and white paper downloads and As Table 3 indicates, these results vary
track webinar attendance followed by visits somewhat from Simkin and Dibb’s findings
TH

to our website. Prospects are ranked by
frequency of visit and content viewed.
(networking/computers, medium-sized
company (segment-of-1))
U
in the United Kingdom more than a decade
earlier. They also found profitability (ranked
first) and customer satisfaction (ranked fourth)
as top five selection criteria. Their three

In this day and age ‘one size fits all’ will cost remaining top five factors – market size,
A

you market share, if not your entire market. market growth and sales volume – fared
(government services provider, medium- considerably worse in the follow-up research.
sized organization (undifferentiated)) Ease of access of business and competitive

Table 3: Criteria for target market selection

Selection criteria Count Rated 1st Rated 2nd Rated 3rd Overall Attractiveness
measure criteria
(Simkin/Dibb)

1.Opportunities in the industry 32 9 13 10 63 Occasional

2. Sustainable differentiated advantage 29 13 8 8 63 Occasional
3. Profitability 30 12 6 12 60 Top
4. Product differentiation 22 8 9 5 47 Occasional
5. Customer satisfaction 19 9 8 2 45 Frequent
6. Market size 21 5 10 6 41 Frequent
7. Ease of access of business 18 6 4 8 34 Frequent
8. Market growth 18 5 3 10 31 Occasional
9. Sales volume 10 2 5 3 19 Frequent
10. Competitive rivalry 6 0 2 4 8 Occasional

64 © 2014 Macmillan Publishers Ltd. 2050-3318 Journal of Marketing Analytics Vol. 2, 1, 59–69
 Target market selection in B2B technology markets

rivalry had limited support in both research
studies.
There were 13 write-in criteria by
respondents although none received multiple
mentions.
An interesting finding, however, is that
firms that are more creative in their market
selection criteria (that is, use one or more
different criteria such as relationship potential
of projects, product synergy, turnaround
time, focus on largest resellers, and so on) are
more successful in target marketing success.
Sixty-two per cent of these companies were
successful or very successful in their target
marketing versus 54 per cent for the sample.
target market success via a stepwise regression
analysis. This model explained 22 per cent
of overall variance (Table 4B). An example
of how one company views strategic
marketing challenges is briefly stated:
Segmentation is a key way to establish a
competitive strategy. (automotive tire
manufacturer, small firm)
The fourth research question assessed
the concept of market redefinition. Market
definitions are built on three fundamental
elements – customer groups (market
segments), customer functions and uses
(market needs), and technologies (Buzzell,

PY
The third research question investigated 1978; Abell,1980). The first two options
the relationship among five key marketing are market-oriented approaches while the
activities – competitive analysis, customer third alternative is production-oriented.

relationship management, market research,
niche marketing and use of social
networking/media – and target marketing
success. Although correlations (see Table 4A)
revealed statistical significance for three
R
variables (competitive analysis, customer
relationship management and market
O
O
When redefining markets, business executives
select one of these three choices as a primary
C
change agent.
Table 5 found that 78 per cent of the
companies using marketing-oriented
approaches were successful in their overall
use of technology (this includes product

research) with respect to target market and process innovation, management

success, only competitive analysis (t = 4.12,
TH

know-how, and use of research and

P = 0.000) was found to be a predictor of development funds). In contrast only
U

Table 4: Target marketing success and marketing activities

A. Correlation matrix
A

Competitive Customer relationship Research Niching Social media Targeting

analysis (CA) management (CRM) (RES) (NICHE) (SOCMED) (TARGET)

CA 1.000 0.353** 0.487** 0.127 0.154 0.388**

CRM 1.000 0.198 0.192 0.435** 0.304*
RES — 1.000 0.265* 0.155 0.323**
NICHE — — 1.000 0.220* 0.159
SOCMED — — — 1.000 0.190
TARGET — — — — 1.000

B. Stepwise regression analysis

Variables entered Unstandardized coefficient Standard error T-statistic Significance

Constant 1.936 0.422 4.587 0.000

CA 0.486 0.118 4.125 0.000

*P<0.05, ** P<0.01.
Dependent variable: TARGET.
Variables excluded from the model: CRM, RES, NICHE, SOCMED.
F-value, significance = 17.02, P = 0.000.
R2 (1, 65 degrees of freedom) = 0.221.

© 2014 Macmillan Publishers Ltd. 2050-3318 Journal of Marketing Analytics Vol. 2, 1, 59–69 65
 Weinstein

Table 5: Technological success by market definition successful with this approach, the other
strategya half are not. For those latter organizations,
Market definition Successful Not Totals
strategy using successful
changes are recommended. This might
technology using require new approaches to segmentation
technology (for example, employing different
Customer Needs 23 6 29
segmentation bases), reducing the number of
Customer Groups 19 6 25 segments targeted or in some cases switching
Technology 6 7 13 to single segment or segment-of-1 marketing.
All companies 48 19 67
The single segment strategy also had mixed
χ = 5.23, 2 DF, P = 0.073.
a 2
success. This market selection option may
be ideal for new or small companies or those
entering a new line of business. In many cases,
46 per cent of companies using a production however, a more varied strategy to reach
emphasis were successful in applying customers with varying desires is suggested
technology; this is likely due to failing to (that is, two or more marketing programs or

understand market desires. As Table 5
demonstrates, this finding was marginally
statistically significant (P = 0.07). One
entrepreneur explained his simple yet
PY
customerization). Marketers must select from
the alternative market segments one or more
groups to target for marketing activity. Each

effective research process for rethinking
his company’s view of the market.
We ask nice clients twice a year (we visit
them) and ask them why they use us or what
R
do they need. (personalized printing, small
firm)
O
O
of the individual segments must be evaluated
on its own merits and in conjunction with
C
the capabilities and environmental situation
surrounding the firm. This evaluation
recognizes that the options are unique and
have varying degrees of attractiveness to
organizations. Of the four possibilities, the

segment-of-1 strategy was the most successful

TH

(based on limited observations). If feasible,

this market selection option should be
TARGET MARKETING – carefully considered as a potential competitive
STRATEGIC IMPLICATIONS edge.
U

Although market segmentation is renowned Market selection criteria has the potential
as a legendary academic marketing concept to be a powerful determinant of segmentation
A

and is a widely accepted industry practice, the
corporate performance of segmentation
initiatives are often disappointing. This study
found, however, that the value of target
marketing has been realized by business
technology firms as more than 90 per cent
of them know that customers’ characteristics,
needs and wants differ. The small minority
of firms that use a one size fits all
(undifferentiated) strategy were least
effective in target marketing success.
The three targeting options merit
further discussion. Most companies prefer
having multiple marketing programs
directed at multiple market segments.
Although about half of the companies are
success in business and technology markets.
Although this issue has received some
attention in the academic marketing
literature, few practitioners have embraced
the benefits of employing such criteria to
their segmentation analyses. McDonald
and Dunbar (2004) advise that several
market selection criteria be used to choose
appropriate segments. This study reaffirmed
support for profitability and customer
satisfaction as key selection criteria.
In addition to profitability (ranked third
in Table 2) which was the most widely cited
criterion according to Simkin and Dibb,
other frequently used market selection
attractiveness criteria include customer

66 © 2014 Macmillan Publishers Ltd. 2050-3318 Journal of Marketing Analytics Vol. 2, 1, 59–69

satisfaction, market size, ease of access of
business and sales volume (Simkin and
Dibb, 1998). These traditional, generally
well-accepted, and largely performance-
oriented metrics were deemed less important
and ranked fifth through ninth in the current
study. In contrast, other strategic criteria such
as opportunities in the industry, sustainable
differentiated advantage and product
differentiation – which were used only
occasionally in the Simkin and Dibb study –
were quite popular, ranking in the top four.
The need to distance one’s company from
rivals in intense competitive environments,
whic h typify today’s business technology
markets, likely accounts for this dramatic shift
in priorities over the past 15 years by B2B
technology marketers.
Creativity in market selection is highly
encouraged. Tapping innovative market
selection criteria may be a useful activity to
pursue since these firms were generally more
successful than those working only ‘from
R
the list’. Positioning is increasingly critical to
technology marketers (Nesbit and Weinstein,
O
1989). Although most marketing executives
feel comfortable with ‘accepted’ or
TH
recognized industry segmentations, these
are often product-based rather than
customer-focused. Seldom do they provide
U
a firm with a competitive advantage.
Marketing managers should be encouraged
A
to pursue new lines of thinking and build
original, proprietary segmentation models,
where possible. Innovative segmentation
bases or multi-stage models that ‘break the
mold’ differentiate the firm and help find
market segments and/or niches that the
competition has overlooked.
Although target marketing is generally
perceived as a customer focus activity, this
research found that another market
orientation variable (competitive focus)
moves to the forefront. Those firms that had
a strong competitive analysis function were
more successful in target marketing success.
The implication here is that market and
industry research, competitive scanning and
© 2014 Macmillan Publishers Ltd. 2050-3318 Journal of Marketing Analytics Vol. 2, 1, 59–69
Target market selection in B2B technology markets
intelligence, contingency planning, scenario
building, market segment mapping and
other competitive-based strategic marketing
planning activities can play a useful role
in target market decisions as well as future
market redefinitions. (Hence, it is more
than just knowing the customer.)
AREA FOR FURTHER
RESEARCH
The introduction of a more thoughtful
process for market selection into the B2B
segmentation plan can assist marketers design
PY
winning target marketing strategies. As a
starting point, the sample size should be
increased. In lieu of a snowball sampling
O
methodology, future researchers may consider
Crespondent-driven sampling to minimize
potential non-probabilistic sampling bias
(Heckathorn, 1997). Highly targeted industry-
specific mailing lists, panel data or involvement
in practitioner-oriented trade conferences
can be used to widen the scope of the study.
This exploratory project was limited to US
companies. Expanding the research to other
industrialized markets (Canada, European
Union or Japan) is a logical next step. This
will likely necessitate the use of research
collaborators from these regions.
A larger sample would permit more
sophisticated data analysis techniques such
as factor and cluster analyses, regression and
discriminant analyses or structural equation
modeling. Multiple correspondence analysis
(MCA) is another powerful technique that
has found to be useful in segmentation
analysis (Duckworth Analysts, 2014). MCA
employs a set of categorical variables that
allow for the detection and mapping of
large data sets via rich tables and statistical
interpretation.
These approaches can add great insight
into how marketing managers select and
target B2B technology markets.
Measurement improvements are also
advisable. As Dibb and Simkin (2010) note,
67
 Weinstein
segmentation effectiveness is challenging to
measure because it includes ‘hard’ (statistical)
and ‘soft’ (segment quality) measures.
Foedermayr and Diamatopoulos (2008) add
that segmentation effectiveness is difficult to
capture and is often confused with marketing
performance and success metrics. Based on
the current study, measures should be refined
for the target marketing success variable.
A multi-item scale is advisable. A more robust
measure may include customer perceptions,
competitive benchmarks, or even financial
comparisons. Similar to the PIMS stream of
research (Buzzell and Gale, 1987), this latter
component may assess how successful focal
B2B technology companies are in market
definition versus strategic groups (that is,
above, below or meet industry sector average
performance).
In addition to market selection options
(undifferentiated, differentiated, single-
segment concentration or segment-of-one),
target market selection criteria (see Table 3)
R
and marketing activities, other relevant
variables can be built into the research
O
program. This includes business segmentation
TH
bases (firmographics, psychographics and
other behavioral dimensions); technological
success variables (for example, product,
process and management know-how) and
U
redefinition strategies.
It has been suggested that organizations
A
objectively evaluate their level of
segmentation sophistication and strive for
strategic segmentation ( Jenkins and
McDonald, 1997) – that is, a company rates
high on both customer-driven and
organizational integration dimensions. Dibb
and Simkin’s (2001) proposed response to
segmentation problems in infrastructure (prior
to undertaking segmentation), procedures
(during the segmentation process) and
operations (facilitated segmentation
implementation) can be enlightening in
this evaluation. It is critical that segmentation
researchers get buy-in from management
and the marketing team to develop viable
target marketing strategies (Openview, 2012).
68 © 2014 Macmillan Publishers Ltd. 2050-3318 Journal of Marketing Analytics Vol. 2, 1, 59–69
These ideas can be incorporated into follow-
up studies on market selection in B2B
technology markets.
Kim and Mauborgne (2005) assert that
market leaders in the New Economy will
succeed not by beating competitors but
by offering powerful leaps in value in
uncontested market spaces. Hence, creative
market definition of emerging/imagined
markets will take precedence over segmenting
existing markets. This argument dovetails the
recent stream of research on market-driving
behavior advocated by Jaworski et al (2000),
Kumar et al (2000) and Weinstein (2006).
Other new B2B segmentation and
PY
targeting challenges have risen to the
forefront in the past decade and are worthy
areas of scholarly work. These include
O
relationship segmentation (Freytag and
Clarke, 2001), dynamic segmentation
C
(Schultz, 2002), strategic segmentation
(Goller et al, 2002), understanding customers’
customers (Stines, 2003), creating segments
out of sectors (Simkin, 2004) and B2B
psychographics (Barry and Weinstein, 2009;
Kenney and Weinstein, 2010). Segmentation
accountability and measurement as well as
model refinement should be major priority
areas for research and practice (Dibb and
Simkin, 2010). Finally, Canhoto et al (2013)
believe that social media may be useful
in understanding organizational segmentation
practices.
REFERENCES
Abell, D.F. (1980) Defining the Business. Englewood Cliffs, NJ:
Prentice-Hall.
Barry, J. and Weinstein, A. (2009) Business psychographics
revisited: From segmentation theory to successful marketing
practice. Journal of Marketing Management 25(3–4): 315–340.
Bossidy, L. and Charan, R. (2002) Execution: The Discipline
of Getting Things Done. New York: Crown Business.
Buzzell, R.D. (1978) Note on Market Definition and Segmentation.
Cambridge, MA: Harvard Business School.
Buzzell, R.D. and Gale, B.T. (1987) The PIMS Principles:
Linking Strategy to Performance. New York: The Free Press.
Canhoto, A.I., Clark, M. and Fennemore, P. (2013) Emerging
segmentation practices in the age of the social customer.
Journal of Strategic Marketing 21(5): 413–428.

Churchill, Jr.G.A. (1995) Marketing Research: Methodological
Foundations, 6th edn.Fort Worth, TX: Dryden Press.
Cleland, A.S. and Bruno, A.V. (1996) The Market Value Process:
Bridging Customer and Shareholder Value. San Francisco, CA:
Jossey-Bass Publishers.
Clemons, E.K., Nunes, P.F. and Reilly, M. (2010) Six
strategies for successful niche marketing – how to win big
by thinking small. Wall Street Journal 24 May. http://online
.wsj.com/article/SB10001424052748704130904574644
084205858424.html, accessed 7 May 2014.
Dibb, S. and Simkin, L. (2001) Market segmentation:
Diagnosing and treating the barriers. Industrial Marketing
Management 30(8): 609–625.
Dibb, S. and Simkin, L. (2008) Market Segmentation Success:
Making It Happen!. Binghamton NY: Haworth Press.
Dibb, S. and Simkin, L. (2010) Judging the quality of customer
segments: Segmentation effectiveness. Journal of Strategic
Marketing 18(2): 113–131.
Duckworth Analysts (2014) Marketing research and statistical
consulting – multiple correspondence analysis. http://www
.duckworthanalysts.com/multiple-correspondence-analysis/,
accessed 7 May 2014.
Dunn, D., Hulak, J. and White, D.S. (1999) Segmenting
high-tech markets: A value-added taxonomy. Marketing
Intelligence & Planning 17(4): 186–191.
Foedermayr, E.K. and Diamatopoulos, A. (2008) Exploring the
construct of segmentation effectiveness: Insights from
C acessed 7 May 2014.
international companies and experts. Journal of Strategic
Marketing 16(2): 129–156.
Freytag, P.V. and Clarke, A.H. (2001) Business to business
R
market segmentation. Industrial Marketing Management
30(6): 473–486.
O
Goller, S., Hogg, A. and Kalafatis, S. (2002) A new research
agenda for business segmentation. European Journal of
TH
Marketing 36(1/2): 252–271.
Heckathorn, D.D. (1997) Respondent-driven sampling: A new
approach to the study of hidden populations. Social Problems
44(2): 174–199.
Henderson, B.D. (1989) The origin of strategy. Harvard
U
Business Review 67(November –December): 139–143.
Jaworski, B., Kohli, A.K. and Sahay, A. (2000) Market-driven
A
versus driving markets. Journal of Academy of Marketing Science
28(1): 45–54.
Jenkins, M. and McDonald, M. (1997) Organizational
archetypes and research agendas. European Journal of
Marketing 31(1): 17–32.
Kahan, D. and Al-Tamimi, A. (2009) Strategies for recruiting
middle eastern-American young adults for physical activity
research: A case of snowballs and salaam. Journal of Immigrant
Minority Health 11(5): 380–390.
Kalafatis, S.P. and Cheston, V. (1997) Normative models and
practical applications of business segmentation in business
markets. Industrial Marketing Management 26(6): 519–530.
Kaushik, A. (2007) Web Analytics: An Hour a Day. Indianapolis,
IN: Wiley Publishing.
Kenney, M. and Weinstein, A. (2010) Psychographic
segmentation of the self-employed: An exploratory study.
New England Journal of Entrepreneurship 13(Fall): 47–56.
© 2014 Macmillan Publishers Ltd. 2050-3318 Journal of Marketing Analytics Vol. 2, 1, 59–69
View publication stats
Target market selection in B2B technology markets
Kim, W.C. and Mauborgne, R. (2005) Blue Ocean Strategy.
Cambridge, MA: Harvard Business School Press.
Kotler, P. (2003) Marketing Insights from A to Z: 80 Concepts
Every Manager Needs to Know. Hoboken, NJ: John Wiley
and Sons.
Kotler, P. and Keller, K.L. (2010) A Framework for
Marketing Management, 12th edn. Upper Saddle River,
NJ: Prentice-Hall.
Kumar, N., Scheer, L. and Kotler, P. (2000) From market
driven to market driving. European Management Journal
18(2): 129–142.
Lamm, E. and Meeks, M.D. (2009) Workplace fun: The
moderating effects of generational differences. Employee
Relations 31(6): 613–631.
McDonald, M. and Dunbar, I. (2004) Market Segmentation: How
to Do It, How to Profit From It, 2nd edn. London: Macmillan
Business.
Neal, W.D. (2002) Shortcomings plaguing the industry.
Marketing News 16(September): 37.
Nesbit, M. and Weinstein, A. (1989) Positioning the high-tech
PY
product. In: H.E. Glass (ed.) Handbook of Business Strategy
Yearbook. Boston, MA: Warren, Gorham, and Lamont,
pp. 30-1–30-8.
Openview (2012) Finding your best customer: A guide to best
O
current B2B customer segmentation, pp. 1-36. http://labs
.openviewpartners.com/ebook/customer-segmentation/,
Peppers, D. and Rogers, M. (2004) Managing Customer
Relationships: A Strategic Framework. Hoboken, NJ: John
Wiley & Sons.
Schultz, D.E. (2002) Behavior changes: Do your segments?
Marketing News 22( July): 5–6.
Simkin, L. and Dibb, S. (1998) Prioritising target markets.
Marketing Intelligence & Planning 16(7): 407–417.
Simkin, L. (2004) From sectorization to segmentation in six
easy steps. In: K. Sausen and S. Dibb (eds.) Proceedings of the
SIG Market Segmentation Research Seminar, Warwick Business
School, Coventry, UK, 29 June.
Stines, A.C. (2003) Telephone conversation, February 20.
Weinstein, A. (1993) Market selection in technology-based
industry: insights from executives. In: R. Varadarajan and
B. Jaworski (eds.) American Marketing Association Educators
Conference Proceedings, Newport Beach, CA, 20–23
February, pp. 1–2.
Weinstein, A. (2006) A strategic framework for defining and
segmenting markets. Journal of Strategic Marketing 14( June):
115–127.
Weinstein, A. (2011) Segmenting technology markets:
Applying the nested approach. Marketing Intelligence and
Planning 29(7): 672–686.
Weinstein, A., Jin, Y. and Barrett, H. (2013) Strategic
innovation in B2B technology markets: A process
perspective. Journal of Supply Chain and Operations
Management 11(1): 64–76.
Wyner, G.A. (2009) Beyond segmentation. Marketing
Management (April): 6–7.
Yankelovich, D. and Meer, D. (2006) Rediscovering market
segmentation. Harvard Business Review (February): 1–10.
69